Focus Media (Kigali)
Sam Ruburika
10 January 2009
The government has developed an industrial master plan (RIMP) which "will focus on how to revamp, develop and sustain the country's manufacturing sector in the medium and long term," according to Trade and Industry Minister Monique Nsazabaganwa.
Despite an average growth of 7% over the past five years, the manufacturing sector still has a long way to go in terms of developing as well as contributing significantly to the gross domestic product (GDP).
For the manufacturing sector to achieve significant progress, the sector has to address a host of challenges. For instance, there is huge competition for foreign investors within the region. Therefore, in order to be able to survive, manufacturers need to embrace innovation as industries tend to produce the same products.
"There is need for our manufacturing industries to have specialties and thus create new markets," Minister Nsanzabaganwa said during the presentation of the RIMP.
The lack of a skilled workforce has also proved to be a hindrance to the development of the manufacturing sector, where industries have to rely on semi-professional workers and sometimes depend on expatriates who come at a heavy cost. To remedy the situation, RIMP proposes to improve the educational system in order to increase the output of skilled laborers.
Another problem is lack of value addition, which prevents Rwandan goods to compete on the regional and international market. To overcome the issue of value addition, there is need to come up with new technologies so as to be able to be able to compete on the market.
Minister Nsanzabaganwa called for industries to shift from low to medium and high technologies if they are to compete with other industries on the regional level. "Industries should examine ways to improve on quality, especially through value addition," she said.
She also recommended the transformation of raw materials to value-added goods which could be exported and thus earn foreign exchange. She also said that diversification among industries so as to produce a wide range of products.
High energy cost
She pointed out that the small and medium industrial enterprises needed to be developed as they are the backbone of every developing economy and, in the case of Rwanda, could also contribute significantly towards the GDP.
According to statistics compiled by the RIMP team, Rwanda has 2199 small and medium enterprises which employed about 39,773 people, while there were 67 large industries (with a turnover of Frw 500 million or more) with some 12,000 employees.
According to industrial entrepreneurs, one of their biggest challenges is the high cost of energy, the lack of strategic marketing and finding export markets for their products.
The lack of human capacity was also mentioned as an obstacle, as well as difficulties to expand their businesses as some of the industrialists lacked people to partner with so as to increase production.
For small and medium enterprises, the difficulty to access finance was an additional stumbling block.
There is also the issue of industries being congested in Gikondo, which according to the research was not ideal for its development. Here, RIMP refers to the decentralization process and urges all districts to avail space for industrialization that would ensure distribution of factories in the long term.
This, however, should be accompanied by an environmental impact assessment by the Rwanda Environment Management Agency (REMA).
According to Vision 2020, the industrial sector should contribute 26% of the GDP, as well as a per capita export ratio of US$ 200 by 2012.
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